Ann Marie still remembers a
conversation more than 13 years ago with her boss, Dr. Fred
Danziger, as if it were yesterday. Dr. Danziger, a dentist in Long
Beach, N.Y., asked Ms. Hurley, then a 26-year-old dental hygienist,
if she had ever thought about disability insurance. She had not, but
after listening to him and meeting with his insurance agent, she
decided that the policy made sense.

Three years later, when she developed pronator teres syndrome, a
painful nerve problem, in one arm and carpal tunnel syndrome in both
hands and was no longer able to do her job, the policy premium of
$519 a year seemed like the best money she had ever spent. But in
1997, after a year and a half of collecting $2,250 a month in
benefits, the insurer, First Unum, stopped paying, even though Ms.
Hurley's contract provided for lifetime benefits. For eight years,
Ms. Hurley, with the help of a lawyer, has been fighting the
company, now called UnumProvident,
to have benefits reinstated. So far, she hasn't had much luck.

"I never thought this would happen to me," says Ms. Hurley, now
39. "In good faith, I submitted a claim, and in not-so-good faith,
they're torturing me."

A spokeswoman for UnumProvident said the company was unable to
comment on Ms. Hurley's case, which was heard by an appellate court
in Brooklyn early this month.

But in November, UnumProvident, which has repeatedly been
criticized by regulators who say it has denied legitimate claims,
reached a $15 million settlement with regulators in 47 states,
including New York, and agreed to review more than 200,000 rejected
claims. The company said there was no finding of wrongdoing. Richard
J. Quadrino, a lawyer in Garden City, N.Y., who represents Ms.
Hurley, said it was unclear if her case would be one of those
reviewed.

Over the last few years, televised reports of business practices
and problems at UnumProvident, which is based in Chattanooga, Tenn.,
and is by far the nation's largest provider of disability insurance,
have led to plenty of caution about disability policies in general.
This is true of both independent agents and consumers, who pay an
average of around $1,000 in annual premiums for policies. Brokers
and financial planners sell practically all disability policies,
except for the group disability insurance offered by employers,
which costs policy holders, on average, about $200 a year.

The number of people buying new policies has fallen, according to
Limra International, an industry trade group in Windsor, Conn. In
2003, about 372,000 new policies were sold, about 5 percent fewer
than in 2002. Fewer than 215,000 policies were sold in the first
nine months of 2004, suggesting that the decline was continuing.

Agents and financial planners routinely recommend disability
coverage, and consumer advocates tend to agree. For those who are
self-employed or work for a company that does not offer group
disability insurance, that means buying individual policies. A Limra
study found that while practically all companies with more than
5,000 employees offer disability insurance, availability declines
sharply as head count falls. The benefit is offered at under half of
companies with fewer than 100 employees.

While policies vary greatly, the basic idea is to ensure that
when people are unable to work because of an illness or injury, they
can still cover monthly expenses. Policies, which typically pay
around 60 percent of an individual's pretax salary, can cover both
short-term disabilities, which may keep someone out of work a few
weeks, and long-term disabilities, which may last years. About 3.85
million people have bought some form of disability insurance on
their own, according to Limra. Many are doctors, lawyers and
corporate executives with high incomes, though middle managers are
increasingly adding it, too, said Guy W. Bertsch, vice president for
product development at UnumProvident.

Anyone who does not have an investment portfolio large enough to
cover monthly expenses should probably consider disability
insurance, said Larry Ginsburg, a financial planner in Oakland,
Calif.

"People need to ask themselves what happens if they become sick
or get hurt, which happens a lot more frequently than most people
would like to think," added Mr. Ginsburg, who also serves on the
board of United Policyholders, a nonprofit consumer advocacy group
based in San Francisco that focuses on various types of
insurance.

Indeed, industry data shows that while it is far more common for
people to carry term life insurance than disability insurance, the
chance of an illness or injury that leaves a person unable to work
for several months, or even years, is much greater than the chance
of premature death. The data also shows that women are much more
likely to become disabled over the course of their working life than
men, primarily because women have longer life expectancies and risk
complications from pregnancy.

A Census Bureau study found that a typical 35-year-old making
$50,000 a year had enough savings on hand to cover only two months
of expenses. Yet most disabilities last 90 days or longer, and more
than 1.5 million Americans are considered permanently disabled and
unlikely ever to return to work.

Five states, including New York and New Jersey, provide state
residents with short-term benefits, though the amounts are typically
small - a maximum of $170 a week in New York and $470 a week in New
Jersey for 26 weeks. Federal disability insurance under Social
Security typically kicks in only for disabilities expected to last
more than a year, like chronic heart ailments.

"Most people don't tend to look at disability insurance as much
as they should," Mr. Ginsburg said.

Part of the problem is that disability insurance tends to be much
more complicated than other types of insurance, like home or
automobile coverage, said Jeff Sadler, a broker in Ormond Beach,
Fla., who has sold disability insurance for nearly 30 years and has
written two books about it. Consumers must select from a menu of
complicated options, and many terms are confusing.

Last summer, a Limra study found that more than half of those who
bought disability insurance in the previous year did not know what
percentage of their salary they would receive if they were injured,
and that 45 percent did not know their policy's definition of
disability. Nearly two-thirds of those surveyed had postponed buying
the insurance so they could study it further.

Those who buy policies find that they often have to hand over a
mass of personal financial information, including bank statements
and tax returns, and submit to an extensive review of their medical
histories - a much more comprehensive review than is required for
either life or health insurance. Mr. Bertsch, of UnumProvident, said
that reviewing these records was a normal part of the underwriting
process.

"We're insuring income, so we need proof of income and we need to
determine if the person is physically healthy," he said. He declined
to say what percentage were turned down. The extensive review also
helps to prevent fraud, which Mr. Bertsch said could occur at the
time of application or when a claim is filed. When the economy is
doing poorly, claims tend to rise, he added.

Because disability insurance is more complicated than other
types, consumers may have trouble shopping for the best price
online. And many agents, said Mr. Sadler, who often travels around
the country training others how to sell disability insurance, are
still somewhat reluctant to offer it, after years of listening to
clients complain when their claims are held up or denied. "A lot of
people have stopped selling it because of the problems," he said.

Still, instead of avoiding the insurance altogether, Mr. Sadler
suggests buying a policy from a smaller, well-established company
with a good record of paying legitimate claims. Mr. Ginsburg and Mr.
Sadler both suggest checking with state insurance commissioners
before buying a policy to see whether customers have filed
complaints against a company. "Despite the problems, the whole point
for disability insurance has never changed," Mr. Sadler said. "Most
people don't have a way to earn any money if they're injured."